Crowdfunding and ICOs

The following are some notes on ICOs (all are securities) that can act as a set of things to consider. Always know the rules for registered funding portals, completion of offers, cancellations of offers, and withdrawals, the requirements for non-resident funding portals, and the miscellaneous provisions attached to funding portals.

Securities issued includes: restrictions on resells and disqualification provisions.

Crowdfunding platforms need to be addressed. Look at Kickstarter etc.

Addition:

Rewards-based model

Look to the form of crowdfunding where perks to non-accredited investors, T-shirts, movie passes, software, etc. are issued without receive of any ownership of the company; look at limitations and possible fraud.

Equity-based model

Such a model represents a common-share-based raising, and Kickstarter and Angel Funds are examples; look at additional issues with ICOs.

Charity-based model

Such a model represents a donation-based system where people can give money, raising it before a charitable crowd source.

Debt model — peer-to-peer debt

A crowdfunded debt model allows investors to pull money — ICOs etc . One can make use of it in situations where mortgage companies are unavailable.

Litigation funding

There are varieties of different litigation-crowdfunding sources that allow commencing and continuing litigation; look at issues such as LexShares.

Product pre-order

Such is a pre-sales situation; it is a form of reward-based model, and allows a pre-order to invest and receive products as manufactured. The investors get access before the public does. It may be at a discount price; look into capital-raising issues.

There are abuses in each of the models, and enforcement can be problematic.

Look at certain cases such as Federal Trade Commission vs Eric Chevallier. Permanent injunction being sought, it is an FTC act. Unfair or deceptive acts or practices in affecting commerce can be used.